Personal Finance - Types of Accounts

Today, we're looking at different types of accounts

You'll read a series of short scenarios and decide which type of account is best for the given situation. Answer to the best of your ability - it's just participation (for now)!

Poll

"Jordan just got a summer job and wants a safe place to put his paychecks while he saves for a new laptop in 4 months. Which account should he use?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: Savings

Savings is the best to help with short-term financial goals.

Poll

"Taylor is 22 and just started a job. Her company offers a 401(k), but she also wants to save extra for retirement with tax benefits. Which account is best?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: Roth IRA

Roth IRA can be drawn at 59 and a half years old in addition to retirement, and it is one of only types of accounts in the U.S. that aren't taxed.

Poll

"Alex has saved $10,000 and wants to earn more interest than a savings account but still be able to access some money if needed. What’s the best option?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: Money Market

Fairly easy to access and higher interest than a saving's account.

Poll

"Maria received a $5,000 inheritance that she won’t need for five years. She wants to earn the most interest without risk. Which account should she use?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: CD

A type of savings account that pays a fixed interest rate for a set period of time. CDs are a low-risk way to save money, and they usually have no monthly fees. 

Poll

"Chris wants to build an emergency fund in case unexpected expenses come up, like car repairs or medical bills. He needs to access the money quickly without penalties. Which account is best?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: Savings

Savings is the best to help with short-term financial goals.

Poll

"Emma is planning to buy a house in three years. She wants her savings to grow but doesn’t want to risk losing money in the stock market. What type of account should she use?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: CD

A type of savings account that pays a fixed interest rate for a set period of time. CDs are a low-risk way to save money, and they usually have no monthly fees. 

Poll

"David is 30 years old and is a teacher, meaning he has great retirement and can retire at 55 instead of 68. However, he still has to pay for health insurance since medicare doesn't kick in until 65. He wants to invest money now that he can withdraw later to use for those health insurance payments. Which would benefit him long-term. What account should he choose?"

• Checking

• Savings

• Roth IRA

• CD

• Money Market

Best: Roth IRA

Roth IRA can be drawn at 59 and a half years old in addition to retirement, and it is one of only types of accounts in the U.S. that aren't taxed.

Multiple Select

"Mia is 25 and has two goals: She wants to save for a vacation next year, and she also wants to start saving for retirement. Which two accounts should she use?"

• Checking

• Savings

• Roth IRA

• CD

Open Ended

Which account do you think YOU will use first in real life? Roth IRA, Money Market, or a CD?